How consumer privacy regulation creates opportunities for publishers

08 February 2019

One of the main drivers behind programmatic’s meteoric growth (at least on the demand side) has been the ability to leverage data to find and buy specific users, out of seemingly infinite opportunities, wherever they might be online.

After all, this enabling of “audience-based buying” brought marketers closer to their long-held notion of advertising utopia: reaching the right person, with the right message, at the right time, in the right context.

Data Dilemma

It also, theoretically, went a long way to minimizing wasted ad spend and enabled significant performance gains. The ad dollars flowed. But this shift took its toll on the sell-side.

To secure programmatic budgets (which were growing steadily and taking dollars away from their direct IO business), publishers had to relinquish control over their hard-won audiences by allowing cookie access to DSP partners in real time via cookie syncing. In doing so, they allowed the buy-side to build up and store those valuable audiences in their own platforms, reducing the need to work with publishers directly to gain access to or insights about their users.

Regulation Matters

The rapid proliferation of user-based targeting has understandably been followed by recent increased focus on consumer privacy. The GDPR went into effect across EU member states in May of last year, limiting unfettered access to user information and the ability to share that information with multiple parties across the ecosystem.

With passage of the California Consumer Privacy Act (which really means all of the US, given California’s outsized influence) and the likely imminent passage of the ePrivacy Regulation in the EU in the second half of 2019, the push for greater consumer privacy legislation seems unstoppable. France’s recent lawsuit against Google also indicates that common industry solutions and frameworks for satisfying new consumer data collection, usage, and privacy regulations aren’t always holding up to legal scrutiny, making the prospect of sharing data widely across partners and vendors increasingly difficult in the future.

While the enactment of these measures on such a global scale erodes the value (and calls into question the long-term viability) of cookie-based buying, it may also open a door for publishers to regain over their data and audiences and re-assert their position in the advertising value chain.

Data Diligence

Here are three tips for publishers looking to capitalize on the moment:

Limit access to your pages

A quick Ghostery check across a number of premium sites shows just how easy it is for 3rd-parties to build pools of data on a given publisher’s audiences. Publishers should be constantly evaluating who has access to their users, and what they’re doing with the data they’re collecting. Partners who add value, either by enhancing audience segments with additional data, or providing analytics and attribution services, should be prioritized. Others, who may be packaging up and reselling data, should be de-prioritized or even culled. An added benefit to this pruning process: faster page loading for users.

Use your data to enhance deals with buyers

Creating greater audience scarcity (enabled through the culling process mentioned above) opens a door for publishers to work more closely with advertisers looking to gain access to their users (and maximize the yield they see from those users). Striking guaranteed and non-guaranteed deals directly with advertisers based on 1st-party audience segments gives publishers the ability to more closely link the cost of media to the value of audiences, and thereby extract greater revenue from their inventory, while also benefiting parties up and down the supply chain. Advertisers enjoy the confidence of targeting audiences using the most recent and accurate data pools. And DSPs and SSPs executing the deals incur less waste (and listening costs), because the inventory is pre-filtered to match only the audience the buyer wants.

Let advertisers bring their own data

More than just building and monetizing their own audiences, publishers should start allowing advertisers to bring their first-party data to the table. One of the main benefits to this strategy is that buyers are able to trust the veracity of the audiences they’re buying. From a publisher’s perspective, it opens up new options for inventory segmentation that may not have existed within their proprietary audience pools. Overlaying additional data will always limit scale, by matching cookies at the source of origin rather than through DSP and SSP intermediaries. And publishers and advertisers can at least maximize match rates, minimize data loss, and decrease the risk of inefficient decisioning down the line – thereby offsetting scale issues to the greatest extent possible (while also commanding very premium CPMs).

Audience First

Consumer privacy legislation is pushing us to the point where the party closest to the consumer – typically the publisher – will increasingly enjoy exclusive access to those audiences as well. When we add the unique ability to know who that user is and what their interests are, the value soars. Couple this with the decline in quality and scale in the open exchange and what you have is publisher data that hasn’t been this valuable since programmatic began to take off.

Following these three steps will help publishers maximize that value. It will also deliver greater efficiencies and performance to advertising partners as well as privacy consideration to valued users.